Ministers are to signal this week that they are prepared to bust the 1% pay cap for police and prison officers, as a first step towards recognising the concerns of cash-strapped workers across the public sector.

Concerns about austerity and the public-sector pay cap were highlighted in internal Conservative research carried out before the general election, leaving senior figures aghast that the party failed to act upon the warnings, the Guardian understands.

Jeremy Corbyn has accused Theresa May of being out of touch with the realities of low pay in Britain and mocked her “squabbling cabinet” during a sometimes fractious final prime minister’s questions before the summer recess.

Theresa May has been accused of insulting teachers by offering them a 1% pay rise after she refused to bow to pressure from some Tory MPs, Labour and trade unions to begin easing the public sector wage cap.

Almost a quarter of the teachers who have qualified since 2011 have already left the profession, according to official figures that have prompted further concerns about the pressures on the profession.

Philip Hammond will have to rip up the government’s deficit reduction plan or increase taxes for most of the population if he decides to end seven years of austerity by sanctioning higher public sector pay, reversing welfare cuts and providing extra cash for Whitehall departments, a thinktank has said.

The Maybot blinked uneasily. Her handlers have done their utmost to keep her well hidden in recent weeks, but the one time they have no choice but to allow her out in the open is prime minister’s questions. The woman without qualities is now the woman without authority.

Jeremy Corbyn accused Theresa May of presiding over “a low-pay epidemic” in the UK as he used a noisy and boisterous prime minister’s questions to challenge her repeatedly over the continued cap on public sector pay.

Ministers are to signal this week that they are prepared to bust the 1% pay cap for police and prison officers, as a first step towards recognising the concerns of cash-strapped workers across the public sector.